RESTRUCTURING CHARGES

On December 9, 2010, our board of directors approved a plan to eliminate our use of mercury in the manufacture of chlor alkali products. Under the plan, the 260,000 tons of mercury cell capacity at our Charleston, TN facility was converted to 200,000 tons of membrane capacity capable of producing both potassium hydroxide and caustic soda. The board of directors also approved plans to reconfigure our Augusta, GA facility to manufacture bleach and distribute caustic soda, while discontinuing chlor alkali manufacturing at this site. We based our decision to convert and reconfigure on several factors. First, during 2009 and 2010 we had experienced a steady increase in the number of customers unwilling to accept our products manufactured using mercury cell technology. Second, there was federal legislation passed in 2008 governing the treatment of mercury that significantly limited our recycling options after December 31, 2012. We concluded that exiting mercury cell technology production after 2012 represented an unacceptable future cost risk. Further, the conversion of the Charleston, TN plant to membrane technology reduced the electricity usage per ECU produced by approximately 25%. The decision to reconfigure the Augusta, GA facility to manufacture bleach and distribute caustic soda removed the highest cost production capacity from our system. Mercury cell chlor alkali production at the Augusta, GA facility was discontinued at the end of September 2012 and the conversion at Charleston, TN was completed in the second half of 2012 with the successful start-up of two new membrane cell lines. These actions reduced our Chlor Alkali capacity by 160,000 tons. The completion of these projects eliminated our chlor alkali production using mercury cell technology. We recorded a pretax restructuring charge of $28.0 million associated with these actions in the fourth quarter of 2010. The restructuring charge included write-off of equipment and facility costs, acceleration of asset retirement obligations, employee severance and related benefit costs and lease and other contract termination costs. For the years ended December 31, 2013, 2012 and 2011, we recorded additional pretax restructuring charges of $3.7 million, $2.3 million and $2.8 million, respectively, for employee severance and related benefit costs, employee relocation, lease and other contract termination costs and facility exit costs related to these actions. We expect to incur additional restructuring charges through 2014 of approximately $2 million related to exiting the use of mercury cell technology in the chlor alkali manufacturing process.

On November 3, 2010, we announced that we made the decision to relocate the Winchester centerfire pistol and rifle ammunition manufacturing operations from East Alton, IL to Oxford, MS. This relocation, when completed, is forecast to reduce Winchester’s annual operating costs by approximately $35 million to $40 million. Consistent with this decision in 2010, we initiated an estimated $110 million five-year project, which includes approximately $80 million of capital spending. The capital spending was partially financed by $31 million of grants provided by the State of Mississippi and local governments. The full amount of these grants were received in 2011. We currently expect to complete this relocation by the end of 2016. We recorded a pretax restructuring charge of $6.2 million associated with these actions in the fourth quarter of 2010. The restructuring charge included employee severance and related benefit costs and a non-cash pension and other postretirement benefits curtailment charge. For the years ended December 31, 2013, 2012 and 2011, we recorded additional pretax restructuring charges of $1.8 million, $6.2 million and $7.0 million, respectively, for employee severance and related benefits costs, a non-cash pension curtailment charge, employee relocation costs and facility exit costs related to these actions. We expect to incur additional restructuring charges through 2016 of approximately $5 million related to the transfer of these operations.

The following table summarizes the 2013, 2012 and 2011 activity by major component of these 2010 restructuring actions and the remaining balances of accrued restructuring costs as of December 31, 2013:



	Employee severance and job related benefits			Pension and other postretirement benefits curtailment			Lease and other contract termination costs			Employee relocation costs			Facility exit costs			Total
				($ in millions)
Balance January 1, 2011	$	6.0		$	—		$	1.0		$	—		$	—		$	7.0
2011 restructuring charges	6.4			1.1			—			2.2			1.0			10.7
Amounts utilized	(1.1		)	(1.1		)	(0.2		)	(2.2		)	(1.0		)	(5.6		)
Balance at December 31, 2011	11.3			—			0.8			—			—			12.1
2012 restructuring charges	4.1			—			0.1			2.2			2.1			8.5
Amounts utilized	(1.9		)	—			(0.5		)	(2.2		)	(2.1		)	(6.7		)
Balance at December 31, 2012	13.5			—			0.4			—			—			13.9
2013 restructuring charges (credits)	0.4			—			(0.4		)	0.6			4.9			5.5
Amounts utilized	(3.7		)	—			—			(0.6		)	(4.9		)	(9.2		)
Balance at December 31, 2013	$	10.2		$	—		$	—		$	—		$	—		$	10.2

The following table summarizes the cumulative restructuring charges of these 2010 restructuring actions by major component through December 31, 2013:



	Chlor Alkali Products		Winchester		Total
	($ in millions)
Write-off of equipment and facility	$	17.5	$	—	$	17.5
Employee severance and job related benefits	4.7		12.2		16.9
Facility exit costs	13.2		1.4		14.6
Pension and other postretirement benefits curtailment	—		4.1		4.1
Employee relocation costs	0.7		4.4		5.1
Lease and other contract termination costs	0.7		—		0.7
Total cumulative restructuring charges	$	36.8	$	22.1	$	58.9

As of December 31, 2013, we have incurred cash expenditures of $20.4 million and non-cash charges of $28.3 million related to these restructuring actions. The remaining balance of $10.2 million is expected to be paid out in 2014 through 2016.